The Kumasi Business Owners Association led by brother of Majority Leader Osei Kyei Mensah Bonsu, Nana Mensah Bonsu has hit hard at the Akufo-Addo led government for comparing itself with the erstwhile John Mahama led National Democratic Congress (NDC) in the wake of cedi depreciation against major foreign currencies especially the dollar.
According to the traders, things were not as hard for them then as it is now, for which reason it was untenable for the Akufo-Addo government to compare itself to John Mahama.
“It is unfortunate for the current government to compare the current economic situation to that of the previous administration”, Spokesperson for the Association, Nana Mensah Bonsu observed in an interview on Nhyira FM morning show monitored by MyNewsGh.com.
According to the brother of the Majority Leader and Minister of Parliamentary Affairs, their major business of importing spare parts into the country under this New Patriotic Party (NPP) is on the verge to collapse due to the continuous depression of the cedi against the dollars.
“Majority of our members are NPP but we can’t import or export goods unlike we did under NDC administration. Things are bad and it is for us to speak against some decisions the government has taken”, Nana Mensah Bonsu told the host of Nhyira FM morning show in the wake of report Ghanaians especially business tycoons must be grateful to the Akufo-Addo government.
According to Dr. Gideon Boako, spokesperson for Vice President who is the head of Ghana’s economic team, unlike in the case of the NDC administration at the time, the NPP’s economic fundamentals remain strong considering the rate of the cedi’s depreciation vis-a-vis the rate of inflation.
“If your rate of depreciation is higher than your rate of inflation, it means your fundamentals are absolutely weak. If you are able to achieve a rate of depreciation that is lower than your inflation, then it means your fundamentals are supporting. As at the time, we were having an inflation rate of less than 30%, and still, we were depreciating by 31%. You can’t have a strong fundamental and at the same time, have an exchange rate depreciation that’s higher than your rate of inflation.”
“Today, we have a rate of inflation of around 9.8%, and we’re depreciating at less than 7%, less than that particular inflation rate. It tells you that, had it not been the strong fundamentals that are anchoring the exchange rate, we would be depreciating more than our inflation because inflation is key in the determination of exchange rates. If you want to determine the exchange between a particular currency and the other, it is the inflation differential between the two countries that trade in that particular currency”.
Dr. Boako added that the Ghana cedi was not the only currency going through turbulent times due to some global pressures, making references to the depreciation of the British pound and the Euro against the dollar.
“You may think that because Ghana cedi is depreciating it’s not good. But given the same conditions, the global contagion and all that, look at the depreciation in other countries. I am not saying that is the argument we should do, but it’s important to know that the Euro and the pounds are all depreciating against the dollar. The Argentinian peso is depreciating by 50%. I am giving you this context for you to understand that, it is not necessarily the cedi that has it’s value going down.